Thailand devalued the Thai baht after abandoning its fixed exchange-rate system on July 2, 1997.
For years, the baht had been closely tied to the U.S. dollar. Thailand faced large current-account deficits, heavy foreign borrowing, property-market weakness, and pressure from currency speculators. Defending the peg consumed much of the country's foreign-exchange reserves.
When the peg was abandoned, the baht fell sharply and the crisis spread across East and Southeast Asia. Indonesia, Malaysia, South Korea, and other economies suffered currency declines, banking problems, recession, or emergency international assistance.
The crisis is sometimes described simply as a stock-market crash, but it was broader than falling share prices. Currency and debt problems were central, and stock exchanges were affected as investors reassessed banks, companies, and governments throughout the region.